3 Stocks With Unbelievable Expansion

HearUSA, China Clean Energy and Biostar Pharmaceuticals are three stocks with great growth prospects.

I must be crazy. I buy for only one reason. When asked what that reason is, I say, "Because it doesn't make sense not to." I've got three companies trading at ridiculously low multiples of my calculated future earnings a couple years down the road. These low prices indicate that investors find the opportunity unbelievable.

The investing world must be tone deaf as it is unable to hear the battle cries of HearUSA ( EAR). All of my research suggests that there's a storm brewing that is going to take HearUSA to higher highs.

After talking to the company, I'm biased in believing that their estimates are of the "easily beatable" variety. But then again, I also am disregarding analyst reports on the company as they seem rather uninformed and don't include any of the big upside that I'm seeing. There are two speculative catalysts to consider that I will mention briefly.

HearUSA's innovative relationship with AARP seems like lighting off fireworks in the dark. The fuse is lit. The question is: How big of an explosion are we going to see?

Siemens (SA) recently reported that it is open to a sale of its hearing aid subsidiary, valued at $3.7 billion by Mark Troman of Bank of America, Merrill Lynch. Note that HearUSA's Siemens debt is self-liquidating. Don't you think that whoever is interested in Siemens wants a distribution channel?

China Clean Energy (CCGY.OB) just finished the completion of its Jiangyin plant, which can be used to produce biodiesel and specialty chemicals. This should expand capacity at triple-digit percentage rates. It's also my opinion that this company is making money that disappears off the income statement due to warrant liabilities. I can't find any reason not to own, and so I do.

A Chinese pharmaceutical company, Biostar Pharmaceuticals ( BSPM.OB), is looking to expand its supply network from 1,320 sales outlets to 10,000 sales outlets in the next two years and has recently received several approvals from the local government to move forward with their business. I'm expecting upside surprise going into the next quarter.

One thing I will point out on these last two is that the ChiNext, China's new Nasdaq-style stock market, just opened up with P/E ratios 50+. In those instances, you are paying for the growth. In the companies I've mentioned, the prices that the companies are trading at suggest that growth would be a surprise. In this way, you can make uncertainty work for you and get growth for free.